London is Britain’s top rental hotspot for 2017 in terms of demand and enquiries, followed by Birmingham, Bristol, Leeds and Manchester, a new piece of research has found.
The research from The House Shop aims to help landlords understand more about the dynamics of their area with a view to filling their properties and ensure a regular rental income.
Nick Marr, co-founder, said that with the buy to let sector weathering a number of tax and other changes it is important that landlords understand their local rental market in terms of tenant demand to reduce the chances of lengthy and expensive void periods.
The annual data for each area in the top five has been broken down by the demographic of tenants making enquiries, listing type, property type and the number of bedrooms, in order to better understand what tenants in these areas are looking for and what is driving demand in rental markets.
‘The data varied from region to region depending on what our users were looking for, which has helped to build a clearer picture of the rental market in each city. This data can be utilised by buy to landlords to gain a better understanding of the local rental market for each of the top five areas, should they consider expanding their property portfolio in 2018 by choosing to invest in one of these areas,’ said Marr.
‘However, the rental market in the UK is extremely fast paced and changes frequently, resulting in new hotspots developing on a yearly, or even monthly, basis. It’s advisable for landlords to keep an eye on current rental market trends and to re-evaluate their investment portfolio accordingly, in order to take advantage of a new investment opportunity in the next high demand location,’ he added.
When looking at the age of tenants making enquiries in our rental hotspots, the research shows that Bristol saw the majority tenant enquiries coming from the millennial demographic with 63.64% of total enquiries.
In comparison, Manchester saw the majority of enquiries from those aged 35 to 50 with 71.43% and Birmingham had the highest number of 51 to 69 year-olds with 34.55% of enquiries.
London also saw a high number of 18 to 34 year olds, making up 50.65% of enquiries on rental property listings in the city over the year, helping it become the number one area for total enquiries. The report suggests that one possible explanation for this could be the career opportunities for this age group in London.
The research also found that there was a marked difference in demand for houses over flats and vice versa depending on the area. For example, London saw a higher number of enquiries for flats at 69.98% whereas visitors making enquiries on a property to rent in Leeds preferred houses at 59.15%.
With rental prices at an all-time high in densely populated areas like London, renters were more likely to seek out less expensive flats or apartments. Whereas smaller cities like Leeds, where rents are much more affordable, saw higher demand for large houses.
Leeds has the highest proportion of enquiries for one bed studios or flats at 35.92%, followed closely by London with 34.01%. Bristol had the smallest number of enquiries for one bed homes with just 21% of total enquiries in the area.
Larger three bed homes were most popular in Birmingham with 28.94% of total enquiries, while pricey London saw the smallest number of three bed enquiries at 17.82%, just over half the amount for Birmingham. Two bed properties were most popular in Bristol, with 47.48% of enquiries.
The firm hopes that landlords will use this data to determine which types of properties they should be investing in when targeting these areas. The last thing landlords want is to invest in a property, only to find that there is little demand for this type of home in the local market, and end up struggling to find tenants and experiencing lengthy and costly void periods.
Recent data from the National Landlords Association (NLA) has shown that 33% of landlords have experienced a void period in the last three months which have lasted 64 days on average which can have a financial impact for buy to let landlords.
It suggests that landlords with properties in the top five locations should have seen high levels of tenant demand over the past year and should have minimised void periods as a result.